By: Carol Nibley
Do you know the true cost of employee turnover in your company? Some analysts estimate turnover can cost two to three times an employee’s annual salary when you factor indirect costs such as productivity, lost sales, and unhappy customers, on top of the more obvious expenses of advertising, interviewing, testing, checking references, and training.
Utah is fortunate to have one of the lowest unemployment rates in the nation. For most employees, this is great news. For most employers, there is still abundant talent in the state from which to select great employees. Some positions, such as software engineer, are a little more challenging to fill.
Recruiting, hiring, and training new employees are expensive. As the economy continues to improve, employers will find their star performers being recruited by other companies willing to offer more money or better benefits.
How can you prevent this costly turnover? Here are a few suggestions:
- Train your managers. The most commonly cited reason for employees leaving a job is a poor relationship with managers. Make sure your managers treat employees fairly, listen to their concerns, and provide opportunities for employees to learn new skills.
- Find out what benefits and working conditions are most important to your employees, and work to incorporate these within the confines of budget and time.
- Reinforce the mission of your company and the importance of each position. Employees like to feel valued for their contributions and understand how their roles fit within the larger scope of the company’s success.
- Reward the right behaviors and publicly praise employees for their hard work.
While you may lose a great employee every now and then despite your best efforts, treating employees well will largely prevent a mass exodus when the new company down the street starts wooing your top performers.
In a future article, we’ll discuss some low-cost and fun motivators for employees.